While the used-vehicle market has faced significant challenges in the last 24 months, particularly from the new low-cost entry-level vehicles, as there is a significant choice of vehicles in this category entering the market, things have begun to change in the past three months or so, vehicle risk intelligence company TransUnion Auto Information Solutions CEO Mike von Hone tells Engineering News.

Although new vehicles are well priced and are also increasingly sold standard with three- to five-year service and maintenance plans, which has been enticing to consumers, there is increasing value to be had in used vehicles as a result of increasing new-car price inflation while used vehicles have experienced some pricing pressure.

Von Hone explains that, the ratio of used to new cars peaked at about 2.5 used vehicles for every new vehicle bought during the height of the recession in 2009/10, but this ratio dropped to as low as 1.5 to 1 by the end of 2012.

He says that since the beginning of this year, TransUnion has seen this ratio start to turn, with the current ratio being about 1.8 to 1.

Von Hone says, in the past two years, the new-vehicle market has experienced positive sales numbers, yet the rate of new-vehicle sales is declining, as the year- on-year growth rate for 2011 was about 18%, decreasing to 10% for 2012. From the beginning of this year to May, the growth rate was about 10%.

He expects this declining growth trend to continue in the foreseeable future, but adds that this may be exacerbated by the continual depreciation of the rand, as vehicle manufacturers are forced to pass on some of these increased costs to consumers. Addi- tionally, consumer credit health has been declining and one would expect to see that filtering through to lower demand eventually.

He expects this could result in increases of 5% to 7% in new-vehicle prices, highlighting that this will negatively impact on affordability across the market but that it is likely to have the most impact on the sales of low-cost entry-level vehicles where consumers are most susceptible to afford- ability constraints.

However, Von Hone notes that the new- and second-hand-vehicle sectors have a symbiotic relationship, and where these price increases may be bad news for the new-vehicle market, it provides an opportunity in the used-car space as relative value improves and consumers become increasingly cost conscious.

Services Offered

TransUnion has implemented a converged solution whereby dealers can access all the company’s automotive data to make more comprehensive valuations – thus, improving their process and speeding up their ability to buy and sell vehicles.

“Historically, the company sold the dealers valuations in book format and if they required a verification report based on a particular vehicle identification number (Vin), the auto- motive dealers would either do this online or call TransUnion’s call centre for this information,” Von Hone explains.

He adds that the introduction of the TransUnion Dealers Guide mobile application (app) is an attempt by the company to streamline this process through a single converged solution to better enable the dealers’ own value chain. The app aims to allow a dealer to make a better buying and or selling decision by giving the dealer access to all the critical information on his or her smartphone at the touch of a button.

The app was introduced in March last year and was upgraded in May to include a scanning feature for both android and iOS smartphones.
Automotive dealers require a subscription to the hardcover TransUnion Dealer Guide to access the app.

In May, the company introduced a similar app for the general public, the TransUnion Car Value app, over which it is in discussions with third-party automotive-related websites about its promotion and distribution.

“The consumer can download the app using a one-off payment option. Consumers can access TransUnion’s database and obtain values, key identifications and verification information for specific vehicles, rather than making valuations based on generic makes and models,” states Von Hone.

He explains that all consumers need to do is download the free Car Value app on their smartphones, register once and use their credit cards to buy either a valuation report for about R10 or a verification report, which includes a valuation report, for about R140.

“Car value and verification report credits can also be bought in multiples of five and the credits are then stored on the system to be redeemed when required,” notes Von Hone.

Once registered, consumers enter the Vin to receive the vehicle’s current retail value.

Key vehicle indicators are also included in the report and the indicators are based on the specific vehicle’s pedigree, he says. The indicators are colour-coded in red, amber or green alerts, relating to the vehicle’s odometer reading and accident history.

Moreover, Von Hone explains that the verification report, which will be displayed on the mobile device and can also be emailed to the consumer, contains confirmation of the vehicle’s main identifiers, such as its regis- tration, Vin, engine number, make, model, variant, colour and year of manufacture.

The report will also contain the vehicle’s financial and accident-claims history, police interest report, international vehicle identi- fication desk status, mileage and microdot history.